How do support and resistance levels work in crypto markets?

Support and resistance levels are price points where cryptocurrencies tend to stop falling or rising. Support is a price floor where buying interest typically emerges, preventing further decline. Resistance is a ceiling where selling pressure appears, limiting upward movement. For example, if Bitcoin repeatedly bounces at $40,000, that's support; if it struggles to break above $45,000, that's resistance. Traders use these levels to make decisions: buying near support expecting a bounce, or selling near resistance expecting a pullback. These levels form from historical price data and trader psychology—many people remember previous price points and act similarly when prices return there.